Chinese Intellecutal Property Law Changes May Stifle Foreign Investment
The Wall Street Journal: The number of patents issued in China has exploded in the last year or so but a change in the laws governing patentability might slow down that trend. Loretta Chao reports on how protective measure are changing the shape of patents and how they "could crimp foreign companies' willingness to invest in cutting-edge technology development in China" in her recent piece entitled China Issued Record Number of Patents in 2009.
The new rules, for example, require that all patent applicants who complete inventions in China apply for security clearance—a process that can take up to six months—before applying for patents abroad. They require patent applicants to declare any use of hereditary material obtained from humans, animals, plants or microbes if inventions are dependent on those genetic resources. They also force patent holders to license their patents to other producers if patents aren't "fully exploited" or if patent owners are deemed to be using the patents in an anticompetitive manner.
Chao quotes an expert in the field of Chinese intellectual property practices and reveals how bleak the outlook is for continued foreign interest in investing under the restrictive rules that contain loopholes detrimental to IP security.
Mark Cohen, an attorney at law firm Jones Day in Beijing, said the rules create uncertainties that could result in extra expense and delay for companies. Because so much research is conducted cross-border, it is unclear what constitutes an invention made in China that would result in the security examination, he said. The delay could increase the risk of trade-secret theft because it extends the period during which people can access the information or copy it before the invention is patented.
Learn more about strict Chinese government procurement regulations and reduced royalties for foreign companies via the above link to Chao's complete story.
ZDNet - UK: There's plenty of excitment surrounding Apple's latest technological wonder, the iPad, but the much-anticipated touch-sensitive tablet computer might be delayed due to intellectual property infringement claims. Eric Everson reports:
Imagine that you have this great product idea and a catchy brand name for it too. As managers, we have all been there at some point or another. Grandiose ideas of being patted on the back and welcomed into the inner circle of the executive leadership team come to mind as you envision all the profit your company is going to earn with this revolutionary new product… then the USPTO (US Patent and Trademark Office) snaps you back to reality as you discover that it’s already been done before!
As a U.S. Company, this is the epiphany that Apple Inc (NASDAQ:AAPL) either failed to acknowledge or figured they had the treasury and legal muscle to flex. As it turns out the iPad, is not a new product in the world of technology, in fact as even some of us more techy types may remember, it was Fujitsu that actually introduced the first iPad. Don’t just take my word for it, just look it up for yourself at USPTO.gov (Hint: start with US Patent: 7,228,469).
Whoops! I wonder how Apple is going to find its way out of this legal morass? Probably with liberal application of dollars and by bringing in the legal heavies to nudge out the competition. Learn how Apple's iPad woes are compounded by the hesitancy of programmers to invest time developing apps for the latest and greatest tech gadget by reading Everson's blog entry, iPad on Lockdown: Apple Faces a Twist of Intellectual Property Law.
PatentBaristas.com: There's a new website dedicated to intellectual property law and Stephen Albainy-Jenei provides the inside scoop in his topical piece, AwakenIP: Helping to Reignite Recognition of the Value of Intellectual Property. Here's the meat of the matter:
This website is an attempt to help reignite broader recognition of the full value of intellectual property. Much criticism has been levied against the usefulness of intellectual property and its place in our new economy, but there are those among us who continue to recognize the wisdom of maintaining strong intellectual property protection for worthwhile contributions that “promote the progress of science and useful arts.”
You can visit AwakenIP here and check out this nascent, and potentially valuable, site for your very own self. Tell 'em I sent you.
BusinessStandard: Latha Jishnu: Cautionary tale of trolls is an excellent analysis of the difficulties companies face when they create novel ideas only to find out that a non-practicing entity (NPE or "patent troll") holds a patent covering their idea, despite the fact that they did not "steal" the idea from an existing product but rather came up with their invention independently and without malice. Jishnu writes:
A just released report by PriceWaterhouseCoopers says NPEs fared far better than the patent holders in legal claims. The consultancy’s Patent Litigation Study of 1,400 infringement cases filed between 1995 and 2008 found that NPEs managed to get more than double the awards that the patent owners or practising entities as they are termed secured. While damages awarded to NPEs ran from $2.2 million to $10.6 million with a median of $4.4 million over this 14-year period, they raked in much more over the last seven years. PriceWaterhouseCoopers found the difference in awards was more than three times in their favour compared to practising entities: Their median was as much as $12 million compared to $3.4 million for patent owners!
Seems a bit odd, don't you think? Practicing patent owners who are producing products and jobs are losing the battle against holding companies that buy up IP in hopes of suing their way to wealth and infamy. Maybe it's time to reform US IP law to specify that a patent cannot just be held for use in legal matters without actually putting the patent to use? Comments? Bueller....Bueller?
Patently-O: Chock full of facts and figures, USPTO Fees 2011: Justifying the Fee Increase, explains the reasoning behind and results of a recent change in policy at the USPTO regarding the cost to patent applicants of applying for protection of their intellectual property. The author of the above piece sums up the larger implications of the 15% increase for the gentle reader:
Although a 15% increase in fees is significant. The current prosecution fees for a large entity total to $2,900. This includes Filing, Search, Examination, Publication, and Issue Fees. Many applicants pay additional fees for late responses, appeals, petitions and RCEs. The median fees paid for a large entity is probably closer to $4,000 and a 15% increase would be $600. For small-entities, the fees are reduced by 50%. Of course, the majority of the cost of patent prosecution is not found in USPTO fees, but rather in the cost of hiring patent attorneys & agents as well as the time spent by inventors and managers. For a large entity, the total cost of preparing an application and prosecuting the application through to issuance easily runs over $25,000. In that scenario, the $600 increase may be better seen as a 2.4% increase.
There are a number of excellent comments in the lively discussion that accompanies the piece and it's well worth a few minutes of your time to read the entire piece and then check out what other interested parties think for this unexpected, but necessary, change to the USPTO's fee structure.
Bonus IP piece o' the day: Pfizer Prepping for Patent Losses by Damien Conover at MorningStar.com.
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